The soy has rallied into an area of resistance. The question now will be what can fuel a further rally. There should be a level of realism regarding supply and demand. I am not sure that is what is driving markets today. The global carry is ample and will grow more without a major weather event. I see the global carry into 2021 over 105-108 mmt. The US carry should be in the 600-650 million bu range. These are substantial numbers and do not equate to beans over $9.00. It is my belief it is time to quantify the risk from the producers standpoint and look at getting short somewhere in here. The products have been led by the oil of late. The global vegoil prices have risen considerably. The question with oilshare above 33%, is has the oil run its course. While the market is fairly strong cash wise, to see further flat price gains at present may take some further reason. The meal could be due a bounce with some slowing of the crush and a considerable relative decline recently. However, the long run does not look bullish in my opinion.
The corn does not seem to ever be able to build on strength. The corn continues to disappoint. There have been some areas of consideration for bad weather. However, the worst appears to be behind us. This may not bode well for a large flat price move going forward. The global picture remains intact. The Chinese have purchased the largest amounts of US corn in 25 years. In addition, there are thoughts of a tighter situation there. In the end perhaps the best the corn can do is sharply sideways.
John J. Walsh
President, Walsh Trading, Inc.
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